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RBC Sees Bank of Canada on Hold This Week; Says Focus Is New MPR

BY MT Newswires | ECONOMIC | 01/26/26 06:54 AM EST

06:54 AM EST, 01/26/2026 (MT Newswires) -- Canada's economic calendar kicks off the week with the Bank of Canada's first meeting of 2026 on Wednesday, where no change to the overnight rate is expected, said RBC.

At December's policy meeting, Governor Tiff Macklem reiterated the BoC's holding bias, contingent on moderate growth and stabilizing inflation. Data since then have largely aligned with those expectations, noted the bank. December labor market conditions improved moderately from a quarter ago, and while core inflation decelerated in December, it remains above the 2% year-over-year target.

The focus will be on the BoC's Monetary Policy Report and a new set of central projections. RBC doesn't anticipate material revisions, and expects forecasts will continue to align well with the bank's cautiously optimistic view for a gradual recovery in 2026.

The BoC is slated to release its policy decision and MPR on Wednesday at 9:45 a.m. ET.

The BoC's latest Business Outlook Survey (BOS) showed a turnaround in business sentiment in late 2025, but the demand outlook (is) still soft enough to constrain firms' pricing ability, added RBC.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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